336.9-103 MS 1998 [Repealed, 2000 c 399 art 1 s 140]336.9-103 PURCHASE-MONEY SECURITY INTEREST; APPLICATION OF PAYMENTS; BURDEN OF ESTABLISHING.
(a) Definitions. In this section:
(1) "purchase-money collateral" means goods or software that secures a purchase-money
obligation incurred with respect to that collateral; and
(2) "purchase-money obligation" means an obligation of an obligor incurred as all or part of
the price of the collateral or for value given to enable the debtor to acquire rights in or the use of
the collateral if the value is in fact so used.
(b) Purchase-money security interest in goods. A security interest in goods is a
purchase-money security interest:
(1) to the extent that the goods are purchase-money collateral with respect to that security
interest;
(2) if the security interest is in inventory that is or was purchase-money collateral, also to
the extent that the security interest secures a purchase-money obligation incurred with respect to
other inventory in which the secured party holds or held a purchase-money security interest; and
(3) also to the extent that the security interest secures a purchase-money obligation incurred
with respect to software in which the secured party holds or held a purchase-money security
interest.
(c) Purchase-money security interest in software. A security interest in software
is a purchase-money security interest to the extent that the security interest also secures a
purchase-money obligation incurred with respect to goods in which the secured party holds
or held a purchase-money security interest if:
(1) the debtor acquired its interest in the software in an integrated transaction in which it
acquired an interest in the goods; and
(2) the debtor acquired its interest in the software for the principal purpose of using the
software in the goods.
(d) Consignor's inventory purchase-money security interest. The security interest of a
consignor in goods that are the subject of a consignment is a purchase-money security interest in
inventory.
(e) Application of payment in nonconsumer goods transaction. In a transaction other
than a consumer goods transaction, if the extent to which a security interest is a purchase-money
security interest depends on the application of a payment to a particular obligation, the payment
must be applied:
(1) in accordance with any reasonable method of application to which the parties agree;
(2) in the absence of the parties' agreement to a reasonable method, in accordance with any
intention of the obligor manifested at or before the time of payment; or
(3) in the absence of an agreement to a reasonable method and a timely manifestation of
the obligor's intention, in the following order:
(A) to obligations that are not secured; and
(B) if more than one obligation is secured, to obligations secured by purchase-money
security interests in the order in which those obligations were incurred.
(f) No loss of status of purchase-money security interest in nonconsumer goods transaction. In a transaction other than a consumer goods transaction, a purchase-money security
interest does not lose its status as such, even if:
(1) the purchase-money collateral also secures an obligation that is not a purchase-money
obligation;
(2) collateral that is not purchase-money collateral also secures the purchase-money
obligation; or
(3) the purchase-money obligation has been renewed, refinanced, consolidated, or
restructured.
(g) Burden of proof in nonconsumer goods transaction. In a transaction other than a
consumer goods transaction, a secured party claiming a purchase-money security interest has the
burden of establishing the extent to which the security interest is a purchase-money security
interest.
(h) Nonconsumer goods transaction; no inference. The limitation of the rules in
subsections (e), (f), and (g) to transactions other than consumer goods transactions is intended to
leave to the court the determination of the proper rules in consumer goods transactions. The court
may not infer from that limitation the nature of the proper rule in consumer goods transactions
and may continue to apply established approaches. History: 2000 c 399 art 1 s 3